RWANDA - Rwanda's campaign to diversify its exports to cushion the economy against a growing trade imbalance, may take a little longer, with agricultural exports falling by 29 per cent due to depressed international commodity prices.
In the first 11 months of last year, exports fell to $65.2 million from $91.7 million during the same period in 2014, according to the National Agricultural Export Board (Naeb).
The trade imbalance was widened as seven out of the 13 leading agricultural exports — pyrethrum, hides and skins, cereals, pulses, root tubers (cassava), live animals and banana — dipped.
Tea exports recorded positive growth, expanding 40.16 per cent while horticultural exports grew by 41.33 per cent.
But the two agricultural exports did little to narrow the trade gap, which stood at $96.14 million’s worth of exports compared with $481.10 million of imports.
The trade deficit was worsened by the growing demand for agricultural products boosted by World Food Programme sourcing cereals locally to feed hundreds of Burundians and Democratic Republic in refugees’ camps in Rwanda.
NAEB figures show that for the months of August and September (2015) there was no formal export of maize and wheat flour, and from July to September no formal export of maize and sorghum.
Export receipts from skins and hides also dipped largely due to the growing local demand from Chinese investors. One of the investor — Kigali Leather Ltd — has a capacity to process 60 containers of skins and hides.
Despite the growing local market, analysts insist that agricultural exports have been driven down largely by depressed international commodities prices and depreciation of the euro.
The EU is one of the country’s leading trading partners, accounting for about 40 per cent of Rwanda’s exports.
The National Bank of Rwanda says the franc appreciated against the euro by 4.7 per cent in 2015.
Imports from the EU have grown at a much faster rate than exports, with the result being an ever-increasing trade imbalance.
Rwanda has experienced a growing trade deficit with the EU, which reached euro 121 million in 2014, up from euro 64 million a decade earlier.
The depressed mineral prices also put Rwanda in a difficult position. Minerals are the second biggest foreign exchange earners after tourism.
The effects of the low global mineral prices are affecting the local mining industry, with miners of wolframite earning $7.96 per kilo in August 2015 compared with $10.62 in the same month in 2014.
The price of cassiterite, one of the leading export mineral dropped by 29 per cent in the first eight months of last year, compared with the same period the previous year.